How to Retain Your Assets after filing a San Bernardino Bankruptcy
One of the reasons many people hesitate when it comes to filing for bankruptcy protection is the belief that if they do file and the bankruptcy is granted, they will lose all of their possessions in order to satisfy the debts they owe. Fortunately, this scenario is far from the truth. There are two main types of bankruptcy that individuals can typically apply for – Chapter 7 and Chapter 13. In a Chapter 7 bankruptcy, some of your possessions may be sold to pay creditors, but it depends upon your individual circumstances. It is highly unlikely that you will lose all, or even most of your possessions to the bankruptcy court. With a Chapter 13 bankruptcy, you work out a repayment plan that allows you to repay all of your priority debts, and depending on your situation, a portion of your other debts. In some instances, you may even be able to keep all of your possessions and still receive a discharge of your debts through a Chapter 13 bankruptcy, even if you do not pay off all of your debts.
Bankruptcy Exemptions – San Bernardino County Bankruptcy
In bankruptcy, exemptions are certain items, or certain dollar amounts of your assets that cannot be sold in order to pay off creditors. In other words, exemptions are those items which are exempt from liquidation under a Chapter 7 bankruptcy. If you are filing for bankruptcy in San Bernardino County as a resident, then you are subject to California’s bankruptcy laws, which have provisions for two different types of exemptions that you can choose from. The dollar amounts of the exemptions for certain items, such as your home or your car, vary depending upon which exemption you choose. A skilled San Bernardino County Bankruptcy Attorney can help you to decide which exemption will suit you best, and allow you to retain the majority of your property.
Nonexempt Property – San Bernardino County Bankruptcy
If you have valuable property that exceeds the amount of your exemption, and you file for a Chapter 7 bankruptcy, these items may be sold in order to pay off your creditors, however, that is not always the case. Some exempt property may not be sold, depending upon its current value, and whether or not it would make a profit once sold that would allow the bankruptcy trustee to pay off some of your creditors. For instance, if you own very expensive furniture, but the trustee deems that it would be too costly to move and store the furniture given its current value, then the trustee may ‘abandon’ the claim on the furniture, thereby allowing you to keep it.
If you have a lot of nonexempt property and are considering filing for bankruptcy, you may be tempted to sell it, or even give it away before the bankruptcy filing. Don’t do it! Selling your nonexempt property before filing for bankruptcy can cause your case to be dismissed entirely, which means you would not be able to discharge any of your debts. You might even be charged for attempting to defraud the court, which can cause other, more serious legal concerns that your current financial situation. If you have recently sold any items of value and are considering filing for bankruptcy, you will need to speak to a reputable San Bernardino County Bankruptcy Attorney in order to find out whether or not a bankruptcy filing is actually in your best interests, or whether you would be better advised to wait until a reasonable length of time has passed after the sale.